A mortgage requires you to pledge your home as the lender's security for the repayment of your loan. The lender agrees to hold the title to your property (or in some states, to hold a lien on your title) until you have paid back your loan plus interest. If you do not repay your mortgage loan, the lender has the right to take possession of your house and sell it in order to satisfy the mortgage debt.

Principal & Interest

All Mortgages have two features in common:

Principal:

The first feature is the mortgage principal, which in the actual amount you borrow. For example, if you take out $200,000 mortgage, you mortgage principal is $200,000.

Interest:

The second feature is the interest, which is the money you pay for the use of the money you borrow. Interest rate are highly volatile and how much interest amount you pay over the mortgage loan depends upon many different factors. The interest you pay on your mortgage may be deductible. (Consult a tax professional for advice) The higher the income tax bracket the more you may save in taxes by owning your own home.

Amortization:

Over specific time of loan (30 years - 15 years - 7 years - 5 years - 3 years - 1 year, etc,), you will pay your mortgage gradually through regular, monthly payments of principal and interest. The amounts of these payments are calculated to let you own your home debt-free at the end of a fixed period. During the first few years, most of your payments will be applied toward the interest you owe. During the final years of your loan, your payment amounts will be applied almost exclusively to the remaining principal. This type of re-payment is called amortization. In addition, when you sell your home you will be required to pay back any remaining principal balance due on your mortgage loan to your lender.

Four major factors that affect your mortgage payments:

The price of the house is determined by location, size, special features (such as garage, a deck, an extra bathroom, extra master bedroom), and over all market condition. However, before you fall in love with your new home, learn the four factors that maybe the key to whether or not you can afford that house of your dream.

1- The size of your down payment,
2- The amount of your mortgage,
3- Your mortgage interest rate, and
4- Re-payment term of the mortgage loan you choose.

A change in any of these four factors will influence how much house you can afford. Examine each of these four factors in detail and carefully, so you can get a good grasp of your buying power.

Mortgage FAQs (Frequently Asked Questions)

Q: How does the loan process work?

A: A qualified broker/lender work with you to choose the best loan program and interest rates available to you. You then need to provide a list of the documents/documenation needed to complete your loan and once this is done your final loan papers are signed by you and you get a date when the loan will be completed.

Q: How do I know if I can get a loan?

A: A good start is, you try our mortgage calculators to see how much mortgage you could pay. You are also welcome to contact us using any of the methods provided on the menu.We will help you evaluate your loan potential. We are in the business and know what kinds of mortgages programs are out there and can help you choose a program that might be right for you. Another good idea is to get pre-qualified for a loan. That means you apply for a mortgage before you actually start looking for a home. Then you'll know exactly how much you can afford to spend, and it will speed the process once you do find the home of your dreams.

Q: How do I find a lender?

A: Contact us.

Q: What is a credit score?

A: A credit score is an indication of your credit history and assist in measuring your ability to repay a debt in the future.

Q: Can I become a homebuyer even if I have had bad credit, and don't have much for a down-payment?

A: Yes. Your credit doesn't have to be perfect to purchase a home. Difficult financial situations are often because of illness, divorce, or temporary unemployment. If you can demonstrate that the problem was in the past, and you have been able to re-establish a good track record for a sufficient amount of time, you may be in a good position to get a mortgage loan.

Q: What documents I need to have ready while applying for a mortgage?

A: Good question! You should at least have:
If you and your spouse are applying for the loan, social security numbers for both you and your spouse
Consecutive pay stubs for the last month
Copies of your checking and savings account statements for the past 6 months
Evidence of any other assets like bonds or stocks
List of all credit card accounts and the approximate monthly amounts owed on each
List of account numbers and balances due on outstanding loans
Copies of your last 2 years' income tax statements Depending on your lender, you may be asked for other information/documents too.

Q: I don't have the standard documentation necessary to get a loan, can I still apply for loan?

A: We offer special loan programs for such type cases, for further information contact us using the "contact us form".

Q: When should I refinance my mortgage?

A: To determine whether you should refinance, compare the following:
Current interest-rates compared the rate you are currently paying.
Your current payment compared to what your payment would be with a lower rate, or features such as interest-only payments.
The amount of time you expect to live in your home.
The cost to refinance your mortgage.

Q: How can a shorter term save me money on a Fixed-Rate Mortgage?

A: Simple, if you go for a shorter term, you can save thousands of dollars in interest expense because you'll be paying off the loan sooner. Although your payment will be more each month, it may not be as much as you may think.

Q: What is a good faith estimate (GFE)?

A: A good faith estimate (GFE) is an estimate that outlines the costs you will incur during the mortgage process. This is provided to you when you apply for your loan.

Q: How are the funds from my escrow account used?

A: The funds from your escrow account are used to pay property taxes and insurance. The payment is called an escrow payment, and a mortgage servicer withdraws the money.